Cano Petroleum, Inc. (NYSE Amex:CFW) today announced its
financial results for the fourth quarter and fiscal year ended June
30, 2009.
2009 Fiscal Year Results
For the fiscal year ended June 30, 2009, Cano reported net
income applicable to common stock of $7.9 million, or $0.19
per share, a $29.5 million improvement as compared to the
$21.6 million loss applicable to common stock for the 2008
fiscal year. Net income increased as a function of a $36.9 million
gain on derivatives ($75.7 million improvement), preferred stock
repurchased for less than the carrying amount of $10.9 million,
income from discontinued operations of $11.5 million
($8.0 million improvement) and lower preferred stock dividends
of $1.4 million. These positive factors were partially offset
by higher operating expenses of $49.7 million ($38.1 million of
which was non-cash), lower operating revenues of $9.3 million,
lower deferred income tax benefit of $7.1 million and a $0.7
million goodwill impairment.
Revenue for the fiscal year ended June 30, 2009, was $25.4
million, down 27% compared to $34.7 million for the fiscal year
ended June 30, 2008. The dramatic fall in commodity prices from
July 2008 through December 2008, further impacted by the widening
of differentials for the same period, and the continued fall in
natural gas prices from January 2009 through June 2009, partially
offset by a recovery in oil prices since April 2009 resulted in a
$12.0 million decrease in revenue, offset by a $3.7 million
increase from improved crude oil sales volumes, partially offset by
a $1.0 million decrease due to lower natural gas sales volumes. For
the fiscal year ended June 30, 2009, Cano's sales were 309 MBbls of
oil and 776 MMcf of natural gas, or 438 MBOE, a 9% increase
compared to the prior fiscal year. During the current fiscal year
reporting period, the average prices the Company received for its
oil and natural gas were $62.17 per barrel and $7.57 per Mcf,
respectively, or $57.23 per BOE. For the prior fiscal year ending
June 30, 2008, oil sales were 249 MBbls at an average price of
$94.08 per barrel and natural gas sales were 908 MMcf at an average
price of $11.99 per Mcf, or 401 MBOE at an average price of $85.72
per BOE.
Operating expenses increased by $49.7 million for the 2009
fiscal year as compared with last year. The increase is primarily
attributable to (i) $26.7 million in impairments to our Barnett
Shale properties, (ii) $11.4 million exploratory expense at our
Duke Sand waterflood as a result of shutting-in our Barnett Shale
wells, the source of water for the waterflood, (iii) increased
lease operating expenses of $5.5 million (Panhandle of $4.2 million
as relates to increased workover activity, Cato of $2.1 million to
support increased production, partially offset by lower expenses at
Desdemona of $1.1 million), (iv) higher G&A expenses of $4.3
million primarily due to higher litigation costs pertaining to the
settlement costs and legal fees pertaining to the Panhandle fire
litigation and (v) higher depletion/depreciation expense of $1.8
million due to capital expenditures incurred during the past two
years. On a BOE basis, lease operating expense for the 2009 fiscal
year increased to $41.28, as compared to $32.69 for the prior
fiscal year.
Interest expense for the 2009 fiscal year was $0.5 million, down
$0.3 million from the prior year period. Interest expense was
reduced in each year by $1.4 million and $2.5 million,
respectively, as we capitalized interest with respect to our
waterflood and ASP projects. We recorded preferred stock dividends
of $2.7 million and $4.1 million for 2009 and 2008, respectively.
Fifty-nine percent of our preferred stock dividends paid during the
2009 fiscal year were paid in-kind, with the balance paid in
cash.
Fourth Quarter Results
For the three months ended June 30, 2009, Cano reported net
daily production of 1,309 BOEPD, up 4% compared to the third
quarter of the 2009 fiscal year and up 15% compared to the fourth
quarter of the 2008 fiscal year. Crude oil production was up 6%
compared to the third quarter of the 2009 fiscal year and up 21%
compared to the prior year fourth quarter due to increased
production from the Cato Field. This was partially offset by
reductions in our natural gas sales, particularly at our Barnett
Shale property, where we continue to experience normal operating
declines, as we ceased drilling activity in early 2008 and have
shut-in natural gas wells due to low commodity prices.
Cano reported a net loss applicable to common stock of $16.4
million, or $0.36 per share. Net income was negatively impacted by
unfavorable movement in commodity prices. Further, we incurred a
$11.4 million (pre-tax) non-cash impairment at our Duke Sand
waterflood as the primary water source for the flood was our now
shut-in Barnett Shale wells. Additionally, as a result of
shutting-in the Barnett Shale wells we recognized a $4.3 million
impairment. The loss was further impacted by a $6.9 million
unrealized loss on commodity derivatives as crude oil prices
improved from March 31, 2009 levels.
Revenue for the three month period ended June 30, 2009, was $5.7
million, down 49% compared to $11.2 million for the prior year
period. During the period, Cano's oil sales were 88 MBbls, up 26%
(70 MBbls in 2008) and 205 MMcf of natural gas, up 3% (199 MMcf in
2008), or 123 MBOE, up 19% (103 MBOE in 2008). Fourth quarter net
production increased as a function of waterflood response seen at
our Cato Field and increased crude oil and natural gas sales at our
Panhandle Field due to development activities. This increase was
partially offset by natural field declines and shut-in production
at our Barnett Shale properties. During the quarter, the average
prices we received for oil and natural gas were $52.57 per barrel
of oil and $5.02 per Mcf of gas, respectively, or $46.31 per BOE.
For the same period ending June 30, 2008, oil prices averaged
$118.80 per barrel, and natural gas prices averaged $14.33 per Mcf,
or $108.21 per BOE.
Liquidity
Under our senior credit agreement, the initial and current
borrowing base is $60.0 million, based upon our proved
reserves. At June 30, 2009, our remaining available borrowing
capacity under the senior credit agreement was $19.3 million ($13.8
million at September 28, 2009). Our borrowing base is to be
redetermined based upon our June 30, 2009 reserve report. We have
submitted our reserve report and other financial information to our
lenders for purposes of this redetermination.
At June 30, 2009, we were in compliance with the debt covenants
contained in our senior and subordinated credit agreements.
However, we may not be in compliance with all of our financial
covenants when we complete the twelve-month period ending December
31, 2009 since our covenant calculations will no longer benefit
from the gain on the sale of our Pantwist Properties. If a
combination of increased production, rising commodity prices,
changes in our capital structure and other actions do not occur by
December 31, 2009, we anticipate not being in compliance with the
covenants. In that event, we will seek covenant relief from our
lenders.
We have taken, and are considering taking, actions to ensure the
aforementioned covenant compliance and sufficient liquidity to meet
our obligations, including funding our current capital expenditure
budget of $13.9 million. Actions we have taken during the six-month
period ended June 30, 2009 to improve liquidity include:
negotiating lower service rates with vendors, making employee
workforce reductions and shutting-in uneconomic wells.
Additionally, we have derivative contracts in place to protect us
from falling crude oil and natural gas commodity prices (through
December 2012) and rising interest rates (through January
2012).
During each year of our prior five-years in existence, we have
successfully accessed the credit and capital markets to fund our
operations and capital needs. We believe the combination of (i)
cash on hand, (ii) cash flow generated from the expected success of
prior capital development projects, (iii) debt available under our
credit agreements and (iv) our ability to access the equity
markets, provide sufficient means to conduct our operations, meet
our contractual obligations and undertake our capital expenditure
program for the 2010 fiscal year.
Reserves / Capital Expenditures
Our reserve report, prepared by independent engineers, dated
June 30, 2009, estimated total proved reserves of 49.1 MMBOE as
compared with last year’s reserves of 53.2 MMBOE. The decrease was
primarily a result of the sales of our Corsicana and Pantwist
Properties (2.6 MMBOE), the fall in commodity prices from June 30,
2008 to December 31, 2008 that led to our impairing 2.3 MMBOE at
our Desdemona Barnett Shale property and other revisions primarily
driven by the fall in commodity prices which changed the forecasted
economic lives of our assets (1.4 MMBOE). These decreases were
offset by positive extensions and discoveries at our Cato field
(2.6 MMBOE). Capital expenditures for the year were approximately
$52.6 million, including $27.6 million at Cato, $18.7 million at
Panhandle, $2.3 million at Nowata and $3.3 million at
Desdemona.
Financial Data
Detailed financial data, including the income statement, balance
sheet and current hedge positions are included in the following
pages.
Operations Update
Total Company Production: Production for the fourth
quarter ended June 30, 2009 averaged 1,309 BOEPD, up 4% from the
third quarter of the 2009 fiscal year and up 15% from the fourth
quarter ended June 30, 2008. Fourth quarter production as compared
to third quarter production was positively impacted by increases at
the Cato waterflood of 6% to average 333 net BOEPD. Production at
the Panhandle field was up 4% to average 625 net BOEPD. For the
2009 fiscal year, production increased 11%, from 1,123 BOEPD to
1,252 BOEPD. Year-on-year production was primarily driven by
increases at our Cato Field, where production was up 123%.
Production for the month of August 2009 averaged 1,209 net
BOEPD. We are projecting first quarter production to be down
approximately 90 BOEPD as compared to the fourth quarter of the
2009 fiscal year. Desdemona will be down approximately 20 BOEPD due
to shutting-in our Barnett Shale production. The Cockrell Ranch
waterflood production will be down roughly 40 BOEPD for
surveillance, as described below. Additionally in the Panhandle,
one of our gas purchasers is experiencing an unplanned plant outage
that started in mid-August and has lasted through late September;
therefore, production for August and September will be off by
roughly 30 BOEPD for the quarter. Lastly, at Cato, as we expanded
the waterflood footprint, and added new injection wells, we have
had to re-allocate injection water. As we moved injection to areas
of the field that had not been previously affected with prior pilot
injection, waterflood production was flat to down slightly as we
expanded the pattern and created new injection points in June, July
and August. With the new water source coming on-line in September,
and injection now at 16,000 BWPD, we are seeing waterflood
production volumes start to increase again. Cato production was
back up to 330 BOEPD by the end of September 2009.
Cato Properties – Cato Field. The Cato Field waterflood
has performed exceptionally well in its initial phase of
development. Phase I encompasses 19 on-line, water injection wells
and 29 producing wells. Since the injection permits were received
in September 2008, we have steadily increased fluid injection from
7,000 barrels of water per day to over 16,000 barrels of water per
day. Corresponding direct waterflood production response has grown
from five infill producers, directly offsetting prior Amoco pilot
injection wells, in December 2008, to 29 pattern well producers
seeing direct response as of June 30, 2009. In February 2009, we
expanded the footprint of this initial phase of the Cato waterflood
from 550 to roughly 640 acres.
In the fourth quarter we completed injection plant capacity
improvements, as we had contemplated when we increased our capital
expenditures budget early this year. We now have ten sub-pumps
operating, with more planned to be installed, as a result of
increasing production pattern response and corresponding high fluid
levels. Our 2010 fiscal year capital plan will add two to three new
injection wells and enlarge the waterflood footprint to
approximately 1,000 acres. We recently identified a new source of
water, that we control, in a non-productive interval, that we
believe will be able to produce 2,000 to 4,000 barrels of water per
day per well, allowing us to increase our daily injection rate and
continue the expansion of the waterflood footprint. This zone has
been penetrated in a number of existing wellbores in the field. As
we develop this new water source, we will be able to increase the
waterflood footprint without realizing a drop in injection rate at
our existing injectors and maintain production from existing
producers. Our goal is to add 4,000 to 6,000 barrels of injection
per day to our waterflood pattern to achieve total pattern
injection of 21,000 barrels of water per day. Net production at
Cato averaged 316 BOEPD in June 2009.
Panhandle Properties: During the quarter ended June 30,
2009, we maintained our average daily water injection rate at the
Cockrell Ranch Unit at roughly 75,000 barrels per day. This
resulted in increasing our average daily production at the Cockrell
Ranch Unit from approximately 80-100 net BOEPD between
June and December 2008 to maintaining 100-120 net BOEPD
production through June 30, 2009. While crude oil production
continues to increase at Cockrell Ranch, the gains are below our
expectations. Based on actual performance of the waterflood through
June 30, 2009, our third party engineer, Miller & Lents, Ltd.
reclassified 724 MBOE of PDP reserves back to PUD. After
considering this reclassification, the remaining amount of the
prior year conversion of PUD to PDP reserves is 674 MBOE. We have
retained Netherland & Sewell to assist us with reservoir
analysis and simulation modeling at the Cockrell Ranch. We are
currently in the process of establishing a controlled injection
pattern to gauge the effects of optimizing water injection into the
highest remaining crude oil saturation intervals of the Brown
Dolomite formation. In essence, we are performing a “mini-flood” in
the key target interval at the Cockrell Ranch. The result of this
field observation, coupled with rigorous reservoir simulation
modeling, should return an optimal pattern configuration to move
the project forward into a more predicable production response
profile. Moreover, the field observation and modeling results will
improve the planning of future development programs for the
remaining Panhandle Properties leases. Waterflood production was
curtailed from the previously reported 100-120 BOEPD to
approximately 60-80 BOEPD during the test period. All previous
production will have been restored by the end of September 2009.
The results of the controlled injection project and the Netherland
& Sewell reservoir simulation should be completed by calendar
year end.
The 2009 fiscal year capital development plan provided for the
development of only one mini-flood phase, the Harvey Unit. The
Harvey Unit had its waterflood permit application approved by the
Texas Railroad Commission on October 20, 2008. The mini-flood
consists of six injection wells and 13 producing wells, of which
four were new wells to be drilled (completed on January 5,
2009). We initiated injection at the Harvey Unit on March 30,
2009 at a rate of 2,500 barrels per day. Benefiting from our
experience at the Cockrell Ranch, the “mini-flood” at the Harvey is
completed only in the highest oil saturation intervals.
During the 2009 fiscal year, we received approval for the Pond
Lease and the Olive-Cooper Lease mini-flood permits from the Texas
Railroad Commission. As a result of the reduction in our capital
plan and a focus on our Cato Properties, we slowed the filing of
our other Panhandle mini-flood permits. We now expect to file the
appropriate waterflood permits for the remaining three mini-floods
by April 2010. Net production at the Panhandle Properties for June
2009 was 627 BOEPD.
Desdemona Properties: During the 2008 fiscal year we
initiated the development of the Duke Sand Waterflood on our
Desdemona Properties. Through June 30, 2009, we have injected over
1.5 million barrels of water into a pilot location of the Duke
Sand reservoir. Our Barnett Shale natural gas wells were the
primary source of water for the waterflood. During July 2009, we
shut-in our remaining Barnett Shale producing wells due to the
outlook for natural gas prices. Accordingly, the source for water
injection for our Duke Sand waterflood pilot ceased. We continue to
believe that this reservoir is an excellent secondary and tertiary
recovery candidate; however, there are no current plans to develop
this project in the foreseeable future. We had no proved reserves
for the Duke Sand Waterflood pilot project.
As mentioned above, in July 2009, we shut-in our Barnett Shale
natural gas wells, and, based upon the current and near-term
outlook of natural gas prices, we have no plans to return these
wells to production in the foreseeable future.
Net production for June 2009 at the Desdemona Properties
was 54 BOEPD. Based upon the previously discussed shut-in wells,
the outlook for production is estimated to be 30-35 BOEPD.
Nowata Properties: Our ASP tertiary recovery pilot
project has been in full operation since December 2007. Through
June 30, 2009, we have injected close to .40 PVI of ASP and
polymer flush. We drilled and completed four observation wells in
December 2008 to enable us to test flood-front results in the pilot
project. We completed injecting our polymer flush during June 2009.
Preliminary results have yielded a two-to-three-fold increase in
producing oil in our pilot observation area. We are pleased with
the observation wells results, and will be performing further
testing of the properties of the produced fluid to gauge the
effectiveness of the current ASP recipe. We anticipate completing
the full ASP Pilot performance analysis within the next three
months. There are currently no proved reserves associated with the
ASP Pilot. Net production for June 2009 at the Nowata
Properties was 229 BOEPD.
Pantwist Properties: On October 1, 2008, we completed the
sale of our wholly-owned subsidiary, Pantwist, LLC, to Legacy
Reserves LP (NASDAQ: LGCY) for a net purchase price of $40.0
million consisting of a $42.7 million purchase price adjusted for
$2.1 million of net cash received from discontinued operations
during the three months ended September 30, 2008 and $0.6 million
of advisory fees. The sale had an effective date of July 1, 2008.
At October 1, 2008, we recorded a pre-tax gain associated with the
sale, exclusive of discontinued operating income, of approximately
$19.2 million ($12.2 million after-tax). All current tax
liabilities associated with such gain were offset by existing net
operating losses. We used the entire $42.1 million net cash
proceeds received from the transaction and cash on hand to pay down
amounts outstanding under our senior credit agreement on October 1,
2008.
Management Comments
Jeff Johnson, Cano's Chairman and CEO, stated, “In the midst of
a very challenging market, our team has made significant progress
on multiple fronts, including:
- Raised $54 million in equity
capital,
- Sold non-core assets totaling
$43 million,
- Entered into two new credit
facilities,
- Implemented annualized cost
reductions of approximately $4 million, and
- Repurchased of 40% of our
Preferred Stock at discounted rates.
“Additionally, overall fourth quarter company production grew by
19%, most notably oil production grew by 26% despite not drilling a
new producing well in almost a year. These results are a testament
to both the quality of our operational team and of our assets.”
Johnson added, “It would be remiss of me not to acknowledge my
disappoint in our share price. However, our operational results
coupled with the achievements listed above provide our shareholders
with a stronger platform to grow value.”
Earnings Call
Details for our year-end earnings and operations call will be
distributed separately on Tuesday, September 29th.
ABOUT CANO PETROLEUM:
Cano Petroleum, Inc. is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Led by an experienced management team, Cano’s primary focus
is on increasing domestic production from proven fields using
enhanced recovery methods. Cano trades on the NYSE AMEX under the
ticker symbol “CFW”. Additional information is available at
www.canopetro.com.
Safe-Harbor Statement — Except for the historical information
contained herein, the matters set forth in this news release are
“forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The Company
intends that all such statements be subject to the “safe-harbor”
provisions of those Acts. Many important risks, factors and
conditions may cause the Company’s actual results to differ
materially from those discussed in any such forward-looking
statement. These risks include, but are not limited to, estimates
or forecasts of reserves, estimates or forecasts of production,
future commodity prices, exchange rates, interest rates, geological
and political risks, drilling risks, product demand, transportation
restrictions, the ability of Cano Petroleum, Inc. to obtain
additional capital, and other risks and uncertainties described in
the Company’s filings with the Securities and Exchange Commission.
The historical results achieved by the Company are not necessarily
indicative of its future prospects. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
CANO PETROLEUM, INC.
Operating Revenue Summary
Three and Twelve Months Ended
June 30, 2009 and 2008
Quarter endedJune 30,
Increase Fiscal Yearended June 30,
Increase 2009 2008 (Decrease)
2009 2008 (Decrease) Operating Revenues
(in thousands) $ 5,673 $ 11,196 $ (5,523 ) $ 25,409 $ 34,650 $
(9,241 ) Sales -- Crude Oil (MBbls) 88 70 18 309 249 60 -- Natural
Gas (MMcf) 205 199 6 776 908 (132 ) -- Total (MBOE) 123 103 20 439
401 38 Average Realized Price -- Crude Oil ($/ Bbl) $ 52.57 $
118.80 $ (66.23 ) $ 62.17 $ 94.08 $ (31.91 ) -- Natural Gas ($/
Mcf) $ 5.02 $ 14.33 $ (9.31 ) $ 7.57 $ 11.99 $ (4.42 ) -- Crude Oil
($/ Bbl) $ 46.31 $ 108.21 $ (61.90 ) $ 57.23 $ 85.72 $ (28.49 )
Hedging Schedule
As of June 30, 2009, we maintained
the following commodity derivative contracts:
Time Period
FloorOil Price CeilingOil Price
BarrelsPer Day FloorGas Price
CeilingGas Price Mcfper Day Barrels
ofEquivalentOil per Day 7/1/09 - 12/31/09 $ 80.00
$ 110.90 367 $ 7.75 $ 10.60 1,667 644 7/1/09 - 12/31/09 $ 85.00 $
104.40 233 $ 8.00 $ 10.15 1,133 422 1/1/10 - 12/31/10 $ 80.00 $
108.20 333 $ 7.75 $ 9.85 1,567 594 1/1/10 - 12/31/10 $ 85.00 $
101.50 233 $ 8.00 $ 9.40 1,033 406 1/1/11 - 3/31/11 $ 80.00 $
107.30 333 $ 7.75 $ 11.60 1,467 578 1/1/11 - 3/31/11 $ 85.00 $
100.50 200 $ 8.00 $ 11.05 967 361
On September 11, 2009, we entered into two fixed price commodity
swap contracts based on WTI crude oil prices as summarized in the
table below.
Time Period FixedOil Price
BarrelsPer Day 4/1/11 - 12/31/11 $ 75.90
700 1/1/12 - 12/31/12 $ 77.25 700
CANO PETROLEUM, INC.
Consolidated Balance Sheets
In Thousands, Except Shares and Per Share Amounts
June 30, ASSETS 2009 2008
Current assets Cash and cash equivalents $ 392 $ 697
Accounts receivable 2,999 3,916 Deferred tax assets — 3,592
Derivative assets 4,955 — Inventory and other current assets 810
642 Assets held for sale — 25,912
Total current assets 9,156 34,759
Oil and
gas properties, successful efforts method 288,857 247,930 Less
accumulated depletion and depreciation (40,208 )
(7,962 ) Net oil and gas properties 248,649 239,968
Fixed assets and other, net 3,240 2,096 Derivative assets 2,882 125
Goodwill 101 786
TOTAL ASSETS $
264,028 $ 277,734 LIABILITIES, TEMPORARY
EQUITY AND STOCKHOLDERS' EQUITY Current liabilities
Accounts payable $ 4,434 $ 8,679 Accrued liabilities 2,003 2,840
Deferred tax liabilities 1,431 — Liabilities associated with
discontinued operations — 1,324 Oil and gas sales payable 702 815
Derivative liabilities 159 9,978 Current portion of asset
retirement obligations 86 345 Total current
liabilities 8,815 23,981
Long-term liabilities Long-term
debt 55,700 73,500 Asset retirement obligations 2,818 2,865
Deferred litigation credit — 6,000 Derivative liabilities — 16,390
Deferred tax liabilities 22,831 26,062 Total
liabilities 90,164 148,798
Temporary equity
Series D convertible preferred
stock and cumulative paid-in-kind dividends; par value$.0001 per
share, stated value $1,000 per share; 49,116 shares authorized;
23,849 and44,474 shares issued at June 30, 2009 and 2008,
respectively; liquidationpreference at June 30, 2009 and 2008 of
$26,987 and $48,353, respectively
25,405 45,086
Commitments and contingencies
Stockholders' equity Common stock, par value $.0001 per
share; 100,000,000 authorized; 47,297,910 and45,594,833 shares
issued and outstanding, respectively, at June 30, 2009;
and40,523,168 and 39,254,874 shares issued and outstanding,
respectively, at June 30, 2008 5 4 Additional paid-in capital
189,526 121,831 Accumulated deficit (40,375 ) (37,414 ) Treasury
stock, at cost; 1,703,077 and 1,268,294 shares at June 30, 2009 and
2008, respectively (697 ) (571 ) Total stockholders'
equity 148,459 83,850
TOTAL LIABILITIES, TEMPORARY
EQUITY AND STOCKHOLDERS' EQUITY $ 264,028
$ 277,734
CANO PETROLEUM, INC.
Consolidated Statements of
Operations
In Thousands, Except Per Share Data
Quarter Ended
June 30, Years Ended June 30, Operating Revenues:
2009 2008
2009 2008 Crude oil sales
$ 4,645 $ 8,265 $ 19,222 $ 23,447 Natural gas sales 1,028 2,851
5,875 10,886 Other revenue - 79
312 317 Total operating revenues 5,673
11,195 25,409 34,650
Operating Expenses: Lease operating 4,932 4,513
18,842 13,273 Production and ad valorem taxes 498 781 2,352 2,454
General and administrative 2,595 4,157 19,156 14,859 Impairment of
long-lived assets 4,272 - 26,670 - Exploration expense 11,379 -
11,379 - Depletion and depreciation 1,562 1,182 5,720 3,903
Accretion of discount on asset retirement obligations 79
52 305 204 Total
operating expenses 25,317 10,685
84,424 34,693
Income (loss) from
operations (19,644 ) 510 (59,015 ) (43 )
Other income (expense): Interest
expense and other (119 ) (271 ) (513 ) (761 ) Impairment of
goodwill - - (685 ) - Gain (loss) on derivatives (4,665 )
(26,281 ) 43,790 (31,955 ) Total other
income (expense) (4,784 ) (26,552 ) 42,592
(32,716 ) Loss from continuing operations
before income taxes (24,428 ) (26,042 ) (16,423 ) (32,759 )
Deferred income tax benefit 8,442 9,389
4,712 11,767 Loss from continuing
operations (15,986 ) (16,653 ) (11,711 ) (20,992 ) Income from
discontinued operations 92 1,150
11,480 3,471
Net loss (15,894 ) (15,503
) (231 ) (17,521 ) Preferred stock dividend (469 ) (1,351 ) (2,730
) (4,083 ) Preferred stock repurchased for less than carrying
amount - - 10,890
-
Net income (loss) applicable to common stock $
(16,363 ) $ (16,854 ) $ 7,929 $ (21,604 )
Net
income (loss) per share - basic and diluted Continuing
operations $ (0.36 ) $ (0.50 ) $ (0.08 ) $ (0.70 ) Discontinued
operations - 0.03 0.25
0.10
Net income (loss) per share - basic and
diluted $ (0.36 ) $ (0.47 ) $ 0.17 $ (0.60 )
CANO PETROLEUM, INC.
Consolidated Statements of Cash
Flows
Years Ended June
30, In Thousands 2009 2008 2007
Cash flow from operating activities: Net loss $ (231 ) $
(17,521 ) $ (790 ) Adjustments needed to reconcile net loss to net
cash provided by (used in) operations: Unrealized loss (gain) on
derivatives (36,900 ) 29,370 1,810 Gain on sale of oil and gas
properties (19,246 ) — (3,811 ) Exploration expense 11,379 — —
Accretion of discount on asset retirement obligations 308 219 154
Depletion and depreciation 5,735 5,009 4,425 Impairment of oil and
gas properties 30,186 — — Impairment of goodwill 685 — —
Stock-based compensation expense 3,159 2,905 647 Deferred income
tax expense (benefit) 1,731 (9,901 ) (484 ) Amortization of debt
issuance costs and prepaid expenses 1,457 1,312 2,231 Treasury
stock (126 ) — — Changes in assets and liabilities relating
to operations: Restricted cash — 6,000 (6,000 ) Accounts receivable
1,408 (844 ) (521 ) Derivative assets 2,423 (291 ) (1,619 )
Inventory and other current assets and liabilities (1,244 ) (1,077
) (794 ) Accounts payable (833 ) 405 510 Accrued liabilities (6,271
) 1,139 1,132 Oil and gas sales payable (229 ) 303 (232 ) Deferred
litigation credit — — 6,000
Net cash provided by (used in)
operations (6,609 )
17,028 2,658 Cash
flow from investing activities: Additions to oil and gas
properties (56,202 ) (87,393 ) (46,324 ) Proceeds from sale of
equipment used in oil and gas activities — 3,000 — Additions to
fixed assets and other (1,333 ) (358 ) (347 ) Proceeds from sale of
oil and gas properties 40,186 — 6,817
Net
cash used in investing activities (17,349 )
(84,751 )
(39,854 )
Cash flow from
financing activities: Repayments of long-term debt (128,500 )
(23,000 ) (68,750 ) Borrowings of long-term debt 110,700 63,000
33,500 Payments for debt issuance costs (933 ) (507 ) (190 )
Proceeds from issuance of common stock, net 53,908 29,046 29,684
Proceeds from issuance of preferred stock, net — — 45,849
Repurchases of preferred stock (10,377 ) — — Payment of deferred
offering costs — (287 ) — Payment of preferred stock dividend
(1,145 ) (1,951 ) (1,423 )
Net cash
provided by financing activities 23,653
66,301 38,670 Net decrease in cash and cash
equivalents (305 ) (1,422 ) 1,474 Cash and cash equivalents at
beginning of period 697 2,119 645
Cash and
cash equivalents at end of period $ 392 $
697 $ 2,119
Supplemental disclosure of noncash transactions: Payments of
preferred stock dividend in kind $ 1,585 $ 2,132 $ 1,747 Preferred
stock repurchased for less than carrying amount $ 10,890 $ — $ —
Common stock issued for preferred stock conversion $ — $ 4,642 $ —
Common stock issued for acquisition of oil and gas properties $ — $
— $ 1,854
Supplemental disclosure of cash transactions: Cash
paid during the period for interest $ 1,852 $ 3,298 $ 3,074
Cano (AMEX:CFW)
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From Jun 2024 to Jul 2024
Cano (AMEX:CFW)
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From Jul 2023 to Jul 2024